Monday, 4 June 2012

EM’s sovereign wealth: the old world’s newest last resort? | beyondbrics

Investors have lost their appetite for IPOs. Banks are unwilling to lend. But for some sovereign wealth funds, there is hardly a crisis at all.

The Qatar Investment Authority recently bought significant stakes in high-profile companies such as Shell and Tiffany’s and is eyeing a 10 per cent stake in mining company Xstrata. The China Investment Corporation recently launched a €5oom SME investment fund in Europe and is looking for opportunities in emerging Europe and Africa. How come emerging market SWFs are so active in an otherwise depressed financial world?

The reason is that SWFs have a dynamic which is very different from the rest of the financial markets.

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